1. RD2003-030 System Enhancements

2. System Enhancements, RD2003-030, Priority 4  Improve and enhance the performance and/or add value to existing systems through the application of existing or new technologies

3. RD2003-030A Drilplex

4. RD2003-030A - Drilplex Description Description  Develop additives to increase the technical application of the DRILPLEX system. Technical targets are: enhanced chemical shale inhibition, better fluid loss control and increased lubricity. Additives should not have a significant adverse effect on fluid properties and are low cost. Approach Approach  Compatibility study using commercially available, low cost, regionally available additives. Include new technology additives where appropriate. Deliverables Deliverables  Effective shale inhibitor package for the DRILPLEX system (end Q2).  Filtration control additive, better cost/performance than FLOPLEX (Q3).  List of candidate lubricants from compatibility study.  Temperature limitation of the DRILPLEX HDD system determined (Q4).

5. 2003-030A - MSP Gantt Chart  Resource: 6 months  Time spent: 3 months  40% complete

6. RD2003-030A - Drilplex Potassium Salts in fresh water-DRILPLEX Viscosity hump/ transient flocculation effect with all K salts, except TKPP. Hardness data from Oxford clay cubes after recovery from fluids (150°F/ 16hrs).

7. EMI-733 and KLA-CURE have minimal effect on fluid properties. EMI-578 destroys DRILPLEX rheology. RD2003-030A - Drilplex Amine based Hydration Inhibitors in fresh water-DRILPLEX

8. Summary of Progress/Deviations Summary of Progress/Deviations  TKPP, EMI-733 and KLA-CURE show the most promise as shale hydration inhibitors.  GLYDRIL range of glycols promote foaming, and are ineffective in fresh water fluids.  Increasing the DRILPLEX concentration does not improve chemical shale inhibition.  Potassium salts lead to an increase in fluid loss, and transient flocculation of fresh water based fluids.  Benefits of HIBTROL and other polymeric inhibitors are marginal  Possible new material may invalidate some of this work Next Step Next Step  Compare performance of TKPP, EMI-733 and KLA-CURE using Foss Eikeland clay.  Accretion tests with TKPP, etc.  Final recommendations after long term ageing tests (4 days).  Proceed to Phase 2. RD2003-030A - Drilplex

9. RD2003-030B Sildril

10. Description Description  This project will define the density and temperature limits of the SILDRIL system and seek to identify products, which can be used to enhance its performance at higher temperatures. Specific targets include 12 ppg Sildril stable to 360F and fluids stable at mud weights of 16-18 ppg  Approach  Compilation of prior field and laboratory data. HTHP density matrix testing of existing products to determine performance limits at different mud weights. Screening of HT products to seek to extend system perfprmance. Deliverables Deliverables  Comprehensive report compiled from lab and field data defining the HT performance limits of the Sildril system at defined mud weight.  Formulations to meet the field requirements of 12 ppg at 360F and 16-18 ppg. RD2003-030B – HT Sildril

11. 2003-030B - MSP Gantt Chart  Resource: 9 months  Time spent: 6 days  5% complete

12. Summary of Progress/Deviations Summary of Progress/Deviations  Project just getting going  Technical Service work in Stavanger has already pushed performance limits to 325F at 11ppg. This fluid successfully applied in an unspecified country  Project will clearly define where Sildril can and cannot be used.  There is significant technical risk the field requirements will not be met fully Next Step Next Step  Start lab work RD2003-030B – HT Sildril

13. RD2003-030C Low Cost Ecotrol

14. RD2003-030C – Low Cost Ecotrol Description Description  To source a product that delivers comparable technical performance at a minimum 20% improvement in cost over Ecotrol.  Additional aims are to obtain improved mud make-up in cold, low shear conditions and improved HTHP performance. Approach Approach  Market survey: Web search and existing manufacturer contacts  Mud tests in “Zero FL” and HTHP OBMs  Concentration profiles to assess cost effectiveness. Deliverables Deliverables  Report and recommendation on alternative products (Q3)

15.  Resource: 0.55 man year  Time spent: 1 month  25% complete RD2003-030C – MSP Gantt Chart

16. RD2003-030C – Low Cost Ecotrol Highlights Highlights

17. Summary of Progress/Deviations Summary of Progress/Deviations  7 Candidate Materials identified and tested so far benchmarked against Ecotrol  Screened in 11.5 ppg and 16.5 ppg Versaclean fluids  Appear at this stage to have a 10% cost advantage in 11.5 ppg Versaclean Next Step Next Step  Continue product screen  Take on the best materials for testing in HTHP fluids RD2003-030C – Low Cost Ecotrol

18. RD2003-030D Polymer Stabiliser

19. RD2003-030D – Polymer Stabiliser Description Description  To determine the efficiency of Gallic Acid as a temperature stabiliser for mainstream polymers in various Candidate M-I fluid systems and to provide sufficient information for a patent memo Approach Approach  Conduct screening tests and gather evidence of product efficacy in generic mud systems bench marking against untreated fluids  Determine benefit or otherwise of different alkalinity sources in the test fluids Deliverables Deliverables  Report on test findings and submit patent memo by end Q2

20.  Resource: 0.05 man year  Time spent: 2 month  80% complete RD2003-030D – MSP Gantt Chart

21. RD2003-030D – Polymer Stabiliser Highlight – typical synthetic polymer WB Fluid Benefits seen in Flopro Glydril HT synthetic polymer HT PAC starch fluid No benefits seen in Sildril Dipro

22. Summary of Progress/Deviations Summary of Progress/Deviations  Gallic Acid tested in HT formulations of Flopro, Dipro, Sildril, Starch PAC, Glydril and HT synthetic polymer  Gallic acid works well in monovalent salt systems  NaOH neutralised salt gives very good results  Optimum ratio of MgO:GA in a RDF enhances rheology  Increases temperature tolerance of PAC and synthetic polymer based FLA to in excess of 300°F  Raises temperature limit of starch based FLA from 250°F towards 300°F  Work on ongoing in Houston and Stavanger  Patent application underway  Additional time used as original allocation not sufficient Next Step Next Step  Complete screening with Summer School Student report and transfer technology RD2003-030D – Polymer Stabiliser